Alabama Senate passes record $3.3 billion General Fund budget

Senate President Pro Tem Greg Reed, R-Jasper (right) speaks to Sen. Andrew Jones, R-Centre, in the Alabama Senate on April 11, 2024 in Montgomery, Alabama. Jones filibustered the state budgets on Thursday, saying they had not moved to the floor in an open manner. (Brian Lyman/Alabama Reflector)

The Alabama Senate Thursday approved a $3.3 billion General Fund budget for the 2025 fiscal year and a supplemental funding bill for the current year of about $400 million.

The General Fund budget number is a record in nominal terms.

“We had a lot of collaboration today,” said Senate President Pro Tempore Greg Reed, R-Jasper. “There was a lot of work that was done before we got here today, related to budgets. I appreciate Chairman (Greg) Albritton, (R-Atmore), and the committee and all their efforts.”

The budget broadly raised allocations for state agencies, though some fell short of what Gov. Kay Ivey recommended in February.

“As far as what we are doing this year with the budget, there are no cuts here,” Albritton said in an interview after the Senate adjourned on Thursday. “There was either level funding or increased funding in most cases to move forward.”

The state’s Medicaid Agency will receive $955 million, about a $92 million increase (10.6%) over the current year’s allocation of $863 million.

The Alabama Department of Corrections will receive $733 million, a $71.3 million increase over (10.7%) $661.7 million the department is budgeted to receive this year. Both allocations were in line with Ivey’s recommendations in February.

The Department of Human Resources, which administers food programs and child protective services, will get $140.8 million, a $19 million (15.5%) increase over its current year’s budget but about $3 million less than the governor’s request.

The Alabama Department of Mental Health will see its budget go from $211 million to $235 million, an 11.3% increase. The increase was about $10 million over what the governor recommended.

State employees will also receive a 2% cost-of-living increase for the second straight year.

Despite the increase, several senators appeared ready to filibuster the budget in protest of what they said was a lack of transparency in the budget process. The Senate Finance and Taxation General Fund Committee last week passed the budgets with no discussion, and the budget bills were not listed on the committee agenda prior to the meeting.

Sen. Andrew Jones, R-Centre, threatened to stall the process with a filibuster almost immediately after the Senate was gaveled into session.

“I think several folks had concerns,” Jones said in an interview after the Senate adjourned. “Anytime a substitute comes to the floor that is of that magnitude, and no one has laid eyes on it, there is going to be concerns about what this is, what is in, what has been taken out, what has been upped, what has been added, so it was important for me to be able to delve into the numbers and look at things, and have a thorough review before I voted for it.”

Aside from concerns regarding the process, Jones also took issue with programs he considered important that were not listed in the budget.

“I had some discussions with the chairman about the Sweet Trails Alabama project fund, which is important to me, something that is from the state of Alabama that helps serve the whole state,” Jones said. “I had some questions why that wasn’t in the budget.”

Roughly 90 minutes into the session, with senators appearing satisfied with the negotiations, the stalling tactics were abandoned, and the body began passing legislation with minimal disruptions.

Albritton highlighted the ongoing growth of the General Fund budget, which often faced regular shortfalls until the state began collecting online sales taxes for the budget in 2018.

“You look back a few years ago, not too long ago, the budgets were extremely tight,” he said in an interview after the session. “That is why we wound up changing the process. Yes, it has been 2011 since we have had any proration, but those years between 2011 and 2016 were extremely tight.”

But Albritton said on the Senate floor that revenue growth in the General Fund is “flat.”

”We have had some growth, but the growth that we have had in the General Fund is based almost completely on the revenue that comes from the interest we hold on to deposit, that includes federal monies and state monies,” he said.

That state is beginning to draw on those deposits, Albritton said, which draws down the interest the state is collecting on the deposits. He also said there is a pending decrease in interest rates. He also said that the valuations in the financial markets have declined.

“We, as a state, have lots of obligations that we have already voted on, that we have already put out there,” Albritton said. “Those continue to be matters dealing with mental health, matters dealing with prisons, and matters dealing with the new state house that is under construction right now.”

Sen. Rodger Smitherman, D-Birmingham, asked about meals for children during off school hours, to which Albritton said would be dealt with in the Educational Trust Fund budget.

Sen. Gerald Allen, R-Cottondale, expressed concern with the Forestry Commission replacing its capital equipment. Albritton said he knows about those issues and is working with the agency on an equipment replacement schedule.

Having cleared the Senate, the budget now moves to the House of Representatives.

“I can’t guess what the House will do, but I can tell you that Chairman (Rex) Reynolds (R-Huntsville) and I have been in conversations,” Albritton said. “And as I develop a work product and things, I share with him, when it is an appropriate time frame, I try to share with him what I am doing.”

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